Government & Politics

It’s not easy for the anti-tax Kansas Legislature to raise taxes, even when the budget is written in red

Kansas House Taxation Committee Chairman Marvin Kleeb, an Overland Park Republican, recently talked to reporters after a round of negotiations with the Senate on tax issues.
Kansas House Taxation Committee Chairman Marvin Kleeb, an Overland Park Republican, recently talked to reporters after a round of negotiations with the Senate on tax issues. The Associated Press

It’s past the dinner hour on a Tuesday, the end of another grinding, fruitless day at the state Capitol. Senators lean back in their chairs in weary frustration, listening to colleagues squabble over the state’s finances.

A senator takes the floor, his voice rising. “This whole situation,” he says, “is ridiculous.”

The Kansas Legislature is nearing a modern-era record for futility. Lawmakers have argued over tax increases and spending reductions for months without nearing an agreement to close a $400 million budget deficit.

Costs are mounting. Furlough notices went out to thousands of state workers Friday.

Word that the Senate would take up the latest tax-hike proposal at midnight Friday might have offered some path to an endgame.

But few seem confident that a compromise would hold. Virtually nobody was surprised that negotiations had dragged on so long.

The endless overtime session now looks utterly predictable, some statehouse veterans said this week, a perfect storm of increasingly fractured intra-party politics, special interest money, inexperienced lawmakers and weak leadership.

The latest proposal, hatched in talks by a special House-Senate committee, mostly protects the zero tax rate established in 2012 for owners of limited liability companies, farms and corporations organized under Subchapter S of the federal tax code. Guaranteed payments to those business owners would be taxable, but critics say it’s easy to dodge that liability by changing the way owners are paid.

That latest bill also would increase the sales tax from the current 6.15 percent to 6.55, with the rate on food purchases to drop to 5.95 percent Jan. 1. It would repeal a food sales tax credit for working poor families, seniors and persons with disabilities.

Lawmakers were set to begin debate early this morning, unclear whether they’d finally found a politically practical set of ideas.

The state’s conservatives, led by Gov. Sam Brownback, have remained deeply committed to reducing the state’s tax burden, particularly on small business owners. They think their tax cuts will eventually yield jobs and growth, that the short-term budget gap can be closed by cutting spending. Some have signed pledges to oppose any tax increase.

Their view has collided with moderate Republicans, who want a broader state tax structure and an end to cuts to education and other state functions. Democrats, meanwhile, resist any plan to raise the sales tax — the levy Brownback prefers.

For more than a month, all three factions have dug in. Fixing a $400 million budget deficit is tough.

“People are stuck,” said state Rep. Marvin Kleeb, an Overland Park Republican at the center of the budget and tax negotiations.

The impasse caused real headaches Friday when furlough notices were issued to some state employees. The state’s administration department said the Legislature’s inability to produce a budget meant paychecks could not be issued for the next pay period, forcing workers to stay home, starting Sunday, until a budget is finalized.

It wasn’t immediately clear how many workers would not be on the job when the furloughs begin. The state has more than 35,000 employees, but some are deemed “essential” and are required to show up for work. Others must stay home.

The state set up a website for questions about the furlough. One query: Will I be reimbursed for my time spent on furlough once a budget is passed?

“This will depend on what is passed by the Legislature,” the Department of Administration said. “So this question cannot be answered at this time.”

Stalemate

The Kansas Constitution limits regular legislative sessions to 90 days in even-numbered years, extendable by vote. Sessions in odd-numbered years have no limit.

Sessions that significantly extend beyond the 90-day cap are almost always the result of budget disagreements.

In 2002, for example, as the post-9/11 recession hit, Kansas lawmakers argued bitterly over a series of tax increases needed to cover a $252 million shortfall. It took 107 days, a record, to settle on raising gas, tobacco and sales taxes, a plan that eerily reflects the options now on the table.

This year’s session will tie that 107-day record this morning.

Conservatives say the current legislative gathering resembles 2002 because raising taxes is always hard. And cutting spending is often equally difficult, particularly when lawmakers have starkly different ideas about how to make the numbers work.

“We’ve got four identifiable coalitions of (Republican) representatives in the House,” said state Rep. John Rubin, a Republican from Shawnee. “Each of the four groups is pretty intransigent,” he said.

No one has yet found the precise combination of tax hikes and spending cuts that can pull enough votes — 63 in the House, 21 in the Senate — to get a bill to the governor’s desk.

Those close to the political center say the unprecedented logjam is the unavoidable result of electing dozens of aggressively conservative legislators.

“It’s ideological,” said former state Sen. Stephen Morris, a Hugoton Republican who lost a bitter primary re-election battle in 2012. “You have a vast majority of the Legislature that is far right, and ideologically pure.”

The Legislature has always had its share of ideological members. In the late 1980s, a group calling itself the “rebels” wreaked havoc with legislative leadership, challenging establishment figures in the Republican party such as Mike Hayden and Bill Graves.

The group lacked sufficient votes to challenge the state’s center-left coalition, though, and its challenges usually fell short. But in the mid-1990s, Kansas conservatives found an electable champion — Brownback, a congressman who upset the state’s GOP hierarchy in 1996 by winning a Senate primary over an establishment Republican.

By 2010, Brownback’s leadership in the Kansas Republican Party was clear and unquestioned. He came back to run for governor. At that point, the conservative takeover of the state’s governing apparatus picked up speed.

“Sam Brownback worked hard … to create a legislature in his own image,” said former state Sen. Dick Bond, a Johnson County Republican who has battled the conservative wing of his party for years.

The governor had help from deeply conservative groups with money to spend, Democrats say.

“The Kansas Chamber, Americans for Prosperity, groups like that,” said former state Rep. Paul Davis, who lost to Brownback in the 2014 race for governor. “It helped get folks elected.”

The Kansas Chamber of Commerce PAC spent $600,000 backing conservative candidates in the 2012 primaries, spending that often eclipsed that of more moderate incumbents. Seven GOP moderates in the 40-member Senate lost — many because they opposed the tax cuts at the center of this year’s budget dilemma.

Yet conservatives do not enjoy absolute majorities in either house of the Legislature. Attempts to find a center-left budget and tax coalition have failed, leaving all factions short of a working majority.

Democrats have played some part in this year’s impasse. They’ve consistently opposed most Republican budget plans, in part because some taxes in the plans are regressive. There’s also lingering anger over the GOP’s use of tax votes as campaign fodder in the past.

But Democrats are the minority party in the Legislature. Republicans hold veto-proof majorities in both houses, so solving the state’s fiscal problems remains largely a GOP chore, something officials in both parties acknowledge. That means finding a center-right agreement among lawmakers who routinely argue over the role of government, spending, education and other issues.

Conservatives don’t dispute their ascendancy in the Legislature. “There’s more conservative clout than there was before,” state Rep. Rubin said.

“It is different,” said Alan Cobb, a veteran of Kansas conservative politics and the founder of the state’s chapter of Americans for Prosperity. “It is better.”

Cobb said moderates are just as ideological as conservatives, pointing out they were in charge in the lengthy 2002 session.

“The notion that the current crop of legislators is somehow less able,” he said, “is horse hockey.”

He and others firmly reject the claim that conservative lawmakers are primarily responsible for this year’s stalemate. They point out voters not only sent conservatives to Topeka in 2012, but re-elected Brownback last year, a clear endorsement of his approach.

“We are a citizens’ legislature,” said state Rep. Jene Vickrey, a Republican from Louisburg and House majority leader. “Those dynamics haven’t changed.”

Complex lawmaking

In 2012, the Legislature failed to draw new districts for House and Senate seats, leaving the task to a federal court. The eventual map arrived so late that dozens of potential candidates either withdrew or found themselves in unfamiliar surroundings, complicating their campaigns.

That turmoil amplified the impact of conservative spending in House and Senate primaries that August. Moderates were swept from seats, replaced by more conservative Republicans.

The process left the Legislature with dozens of new members. Roughly two-thirds of House members in Kansas began serving in 2011 or later. Nearly half of the Senate has turned over since 2011.

“It’s herding cats,” said state Rep. Keith Esau, a Republican from Olathe. “There are a lot of newer members in the last five years. Some of those coalitions are still developing. … The trust hasn’t been built up between people yet.”

Some Republican legislators blame Brownback. They say he declined to provide a road map for avoiding red ink until late May, and then offered a package unacceptable to many lawmakers.

State Sen. Jeff Melcher, a Republican from Leawood, has accused Brownback of an “absence of leadership” during the discussions on spending and taxes.

Brownback has defended his role. “I stand ready to work day and night until the budget is balanced,” he said in a statement May 30.

Bond, a Brownback nemesis, scoffed.

“Sam has been absent without leave,” he said.

Politics at all levels has changed, of course, and Kansas isn’t immune. Congress is working through a similar stalemate and for similar reasons — a polarized political climate, a lack of party discipline, a changing media environment.

“With the advent of the Internet, and the number of people watching, it’s harder for a group to get together and work something out,” Esau said. “There’s always somebody there watching it or tweeting it out. It takes a little longer.”

Kansas may also struggle because the Legislature has no set adjournment date. In Missouri, lawmakers must finish their work by mid-May, a deadline that helps factions focus on solutions.

The long session itself may make compromise difficult. Members already angry at having their lives and jobs disrupted may be unenthusiastic about surrendering their views at session’s end, some lawmakers said.

There have been cracks in the logjam in recent days. House and Senate members eventually agreed to set up a tax conference to settle on a single package, a move that simplifies negotiations but leaves some angry at perceived exclusion from the debate.

The work will go on, with no end in sight. By some estimates the extended legislative session costs taxpayers $43,000 each day.

“They aren’t telling us exactly how long we’ll be in here,” Esau said.

Dion Lefler of The Wichita Eagle contributed to this story.

To reach Dave Helling, call 816-234-4656 or send email to dhelling@kcstar.com.

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